Delayed transit fare assessment

ABSTRACT

At each of a plurality of point of sale terminals (POS) of a merchant, for each of a plurality of consumers, where each consumer seeks to conduct a transaction with the merchant for a good or service at a cost by using a payment device issued by an issuer in a payment system, data is read from a payment device. The data can include an identifier for an account issued by an issuer. Information is stored for each transaction and the consumer is permitted to receive the good or service from the merchant. After the consumer has received the good or service, a batch of the transaction are processed to derive there from the respective costs that are assessable to the respective accounts, where the merchant can be a transit system, the consumer a rider thereon, and the transaction can be access to a facility thereof.

CROSS-REFERENCE TO RELATED APPLICATION

This application claims priority to U.S. Provisional Application Ser.No. 60/887,307, filed on Jan. 30, 2007, titled “Contactless Bank CardTransit Payment”, which is incorporated herein by reference.

BACKGROUND

The present invention relates generally to financial transactions,particularly to customers requesting financial transactions withmerchants, and more particularly to financial transactions conductedwith a financial institution portable payment device issued by afinancial institution, such as a credit card that, that may be used bothin a retail transaction and in a transit fare transaction.

Portable payment devices can take many forms and are used in a greatvariety of financial transactions. The portable payment devices cancomprise, for example, smart cards, payment tokens, credit cards, debitcards, stored value cards, pre-paid cards contactless cards, cellulartelephones, Personal Digital Assistant (PDA) devices, key fobs, or smartcards. The financial transactions can involve, for example, retailpurchases, transit fares, access to venue fares, etc. In all suchtransactions, the portable payment device users (consumers) areconcerned with convenience and the merchants with whom they deal areconcerned with ease of transacting with their customer-consumers.

Preferably, financial institution portable payment devices issued by afinancial institution (FIPPD) are used in an on-line fashion (e.g., apoint of service that is connected to a payment processing system duringa transaction). The information from the FIPPD may be transmittedon-line to an issuer during a retail payment transaction for purposes ofauthorizing the use of the FIPPD for that transaction. The issuer mayreview parameters of the transaction such as transaction amount, credithistory, card authenticity, and other factors when determining whetheror not to authorize or decline the transaction.

However, some merchant transactions are not on-line such that FIPPDauthentication and verification schemes are not readily accommodated.For example, the ability to go on-line in a transit environment such asa subway or bus system, or a venue access environment such as a stadiumor concert hall, may be problematic because of the lack of real timecommunication and lack of network systems for such environments. This isdue in part to the need in such environments to process a transactionwithin about 300 ms, a transit system industry standard, and therebyallow 30 to 45 patrons per minute access into a facility of the transitsystem such as a subway or a bus. Moreover, a bus on an over-the-roadbus route may not have wireless or other communication systems to allowany real-time dialogue with any other systems outside of the bus, suchas for on-line fare assessment or on-line admission ticket/voucher/cardauthorization. Therefore this absence of network connectivity in atransit environment presents a difficulty whenever an on-lineauthentication of the consumer's means of access, such as an admissionticket, voucher, or access card, is necessary in order to determinewhether, for instance, the consumer is entitled to access and hassufficient funds to cover the cost of the desired transaction (fare forriding on the transit system).

Moreover, in a transit environment, the value of the transit fare maynot be known at the time of requested access. A fare calculation maydepend upon the actual travel distance, direction of travel, stationentry and exit locations, mode of travel (subway, bus, water taxi),consumer category (student, senior), and/or times of use (peak,off-peak). Such parameters may be unknown prior to rendering theservice. As such, the transit fare payment and collection process cannotbe performed effectively using a conventional on-line authentication andapproval process.

Traditionally, transit fare calculation and collection have occurred ina closed system. In a closed system, the transit company may issue itsown transit portable payment device, such as a read/write smart card,wherein the transit portable payment device carries the necessarycredentials and data to allow completion of a transaction at the faredevice itself (turnstile, fare box, or other Point of Service). In thiscase, there is no additional processing required for fare determinationat the time of the transaction outside of the interaction between thecard and the fare device. Rather, the card is authenticated and read bythe fare device, logic is performed by the fare device to apply transitsystem fare policy, and the card is updated (rewritten) to finalize thetransaction details including a deduction of any stored value for thecost of fare. The fare device may additionally query a white list, apositive list, a hot list, a negative list and/or a black list utilizingthe card number, for example, to determine whether the transaction willbe completed and the cardholder will be allowed access into a facilityof the transit system such as a subway terminal or bus passengercompartment.

The closed transit system, however, has its drawbacks. In a closedtransit system, the transit portable payment device and transit readersat each station or route must be able to perform fare computations basedon data stored and retrieved from a rider's access card, and subsequentcard terminals/readers must be able to access data written to therider's access card at previous stations. This requirement places asignificant processing burden on the transit system terminals and/orfare processing systems and increases the cost of implementing theinfrastructure for such systems. As fare rates and other relevantinformation generally change over time, this also increases the demandsplaced upon such systems for maintenance of accuracy.

Moreover, one transit portable payment device may not be compatible withall of the fare devices within a rider's travel plan. This can become asignificant problem if a consumer wishes to utilize more than onetransit system during a day's commute, such as by using multiple transitagencies or venues within a single geographical area that provideridership both in and among different jurisdictions, cities orlocations.

The present transit environment presents several challenges, including:

-   -   A common necessity that there can be only one transit portable        payment device for each transit agency or group of cooperating        agencies that cannot be used for other such agencies or groups;    -   The desire to accommodate transit system user's transaction        speed expectations while minimizing risk to the transit agency        for collecting payment for services rendered; and    -   When a portable payment device is ‘read-only,’ not having write        capabilities at the Point of Service, the Portable Payment        devices cannot store the rider's transit chronology data—thus        making the rider's fare calculations somewhat difficult with        such devices. With such off-line transactions, a list (i.e., a        white list of eligible cards or a negative list of rejected        cards based on the unique card number) stored at each transit        fare device is the primary mechanism to deter fraud. This is        sub-optimal since the negative list would presumably grow        unbounded as more FIPPD are issued.

In addition to the transit system rider's desire for a fast transactionspeed when accessing a transit system facility, there are security andother risks associated with the use of a FIPPD that is designed foron-line authorization when it is otherwise used in an off-linetransaction. These risks include, but are not limited to:

-   -   Authentication/Fraud: the lack of FIPPD authentication in real        time creates a high potential for fraud through counterfeiting        techniques;    -   Fare Cost Calculation: where the cost of a transit transaction        is dependent upon the immediate rider history for the card        (entry/exit/length of travel, transfers, etc.), the rider's        transit fare cannot be calculated at each gate or fare box        because the rider's immediate history of travel cannot be        stored, written or resident on conventional FIPPDs;    -   Data Security/Storage: protection of consumer data in a transit        fare system may prove difficult. Tracking data in the form of a        primary account number (PAN) for a FIPPD would require the        transit system to collect and store this data securely, which is        not something transit fare systems commonly do presently. If        implemented, this requirement presents added cost and security        concerns to both the transit system and its riders; and

What is needed in the art is the payment and collection of transactionsutilizing a FIDDP device within the above environments, including accessfares to transit systems and venues, that overcome the challenges anddisadvantages of the prior art.

SUMMARY

A payment transaction can be conducted in a combined scheme utilizing afinancial institution portable payment device (FIPPD). During aconsumer's transaction with a merchant for a good or service,information from the FIPPD can be read at a point of service (POS)terminal. The consumer with the FIPPD receives the good or serviceassociated with the transaction. After the consumer has received thegood or service, the transaction value can be calculated, such as at acentral server, based on predetermined rules and/or policies. Oncecalculated, the transaction value may be transmitted to a paymentprocessing system, such as a credit card payment system, so that themerchant can collect the calculated transaction value from one or moremembers of the payment processing system.

In one implementation, a consumer can seek to conduct a transaction witha merchant for a good, service, or a combination thereof at a POSterminal using a FIPPD associated with an account within a paymentprocessing system. The POS may have a reader, such as a contactless cardreader, that collects data from a data storage region of the FIPPD,including the FIPPD's account information. The data in the storageregion of the FIPPD, along with other transaction information such asthe time of day and POS location, after retrieving the same can then bestored at a location different from the POS. The consumer using theFIPPD for the transaction is then permitted to receive the good orservice from the merchant prior to a calculation of the cost thereof.After the consumer receives the good or service, the transaction costcan be derived and then assessed to the account associated with theFIPPD.

In another implementation, a consumer (rider) may seek access into atransit facility at a transit POS terminal using a FIPPD associated withan account within a payment processing system. The transit POS may havea reader, such as a contactless card reader, that collects data from adata storage region of the FIPPD, including the FIPPD's accountinformation. The data in the storage region of the FIPPD, along withother transaction information such as the time of day and transit POSlocation, after retrieving the same, can then be stored at a locationdifferent from the transit POS. The rider using the FIPPD for thetransit transaction is then permitted to access the transit facilityprior to a calculation of a fare for riding the transit system. Afterthe rider accesses the transit facility, the fare can be derived fromstored rider transaction history data and assessed to the accountassociated with the FIPPD.

BRIEF DESCRIPTION OF THE DRAWINGS

The subject invention will be described in the context of the appendeddrawing figures, where the same numbers are used throughout thedisclosure and figures to reference like components and features:

FIG. 1 is a block level diagram illustrating an exemplary paymentprocessing system;

FIG. 2 is a block level diagram illustrating an exemplary closed transitprocessing system;

FIG. 3 is a block level diagram illustrating an exemplary open transitprocessing system which is compatible with the payment processing systemseen in FIG. 1; and

FIG. 4 is a flow chart illustrating an exemplary process through which afinancial institution portable payment device can be used in theenvironment of the open transit processing system illustrated in FIG. 3;

DETAILED DESCRIPTION

Implementations facilitate the payment and collection of transactionsusing a financial institution portable payment device (FIPPD) such as acontactless card or a smart chip embedded in a mobile device such as acellular telephone. The transaction value of each transaction may not beknown at the time that a consumer in the transaction receives from amerchant one or more goods or services associated with the transactionMechanisms are provided to curb fraud through the use of a negative listsystem (e.g.; a list of invalid account numbers) sometimes referred toas “black list” or “hot list”, and/or through the use of a white or“positive” list system (e.g.; a list of valid account numbers).

As used herein, a FIPPD is intended to be broadly understood as being aportable payment device associated with an account within a paymentsystem. The account may be a credit account, a debit account, a storedvalue account (e.g., a pre-paid account, an account accessible with agift card, an account accessible with a reloadable card). As such, theFIPPD may be a (handheld) device such a cellular telephone, a MP3player, a Personal Digital Assistant (PDA), a key fob, a mini-card, akeychain device (such as the Speedpass™ commercially available fromExxon-Mobil Corp.), a proximity contactless payment device such as onethat complies with the International Organization for Standardization(ISO) 14443, a substrate bearing an optically scannable data region, asmart card, or integral and/or accessorized elements rendering the samefunctional equivalent of and to a contactless bank card associated witha payment system. A contactless payment device is a device thatincorporates a means of communicating with a portable payment devicereader or terminal without the need for direct contact. Thus, suchportable payment devices may effectively be presented in the proximityof a portable payment device reader or terminal. A smart chip is asemiconductor device that is capable of performing most, if not all, ofthe functions of a smart card, but may be embedded in another device.Such contactless devices typically communicate with the portable paymentdevice reader or terminal using RF (radio-frequency) technology, whereinproximity to an antenna causes data transfer between the portablepayment device and the reader or terminal.

Typically, an electronic payment transaction is authenticated if theconsumer conducting the transaction is properly authorized and hassufficient funds or credit to conduct the transaction. Conversely, ifthere are insufficient funds or credit in the consumer's account, or ifthe consumer's portable payment device is reported as lost or stolen,then an electronic payment transaction may not be authorized. In thefollowing description, an “acquirer” is typically a business entity(e.g., a commercial bank) that has a business relationship with aparticular merchant. An “issuer” is typically a business entity (e.g., abank) which issues a portable payment device such as a credit, debit, orstored value card to a consumer. Some entities may perform both issuerand acquirer functions.

In standard operation, an issuer validation (e.g., authorization)request message is created during a consumer purchase of a good orservice at a Point Of Service (POS). The issuer validation requestmessage can be sent from the POS terminal located at a merchant to themerchant's acquirer, to a payment processing system, and then to anissuer. An “issuer validation request message” can include a request forissuer validation to conduct an electronic payment transaction. It mayinclude one or more of an account holder's payment account number,currency code, sale amount, merchant transaction stamp, acceptor city,acceptor state/country, etc. An issuer validation request message may beprotected using a secure encryption method (e.g., 128-bit SSL orequivalent) in order to prevent data from being compromised.

Referring to FIG. 1, one implementation of a payment system 100compatible with a FIPPD is illustrated. The payment system 100 includes,a plurality of merchants 140 associated with one or more acquirers 150,and issuers 170. Each merchant 140 may have one or more merchantlocations 140(a), 140(b) with acquirers 150(a) and 150(b) associatedwith those merchant locations, where ‘a’ can be a value from 1 to ‘A’and ‘b’ can be a value from 1 to ‘B’. The different merchant locations140(a), 140(b) may be affiliated with a single merchant. A consumer 120may purchase a good or service at the merchant locations 140(a), 140(b)using a FIPPD 130. The acquirers 150(a), 150(b) can communicate with anissuer 170 via a payment processor 160.

The FIPPD 130 may be in many suitable forms. As stated previously, theFIPPD 130 can be a mobile device that incorporates a contactless elementsuch as a chip for storing payment data (e.g., a BIN number, accountnumber, etc.) and a wireless data transfer (e.g., transmission) elementsuch as an antenna, a light emitting diode, a laser, a near fieldcommunication component, etc. The FIPPD 130 may also be used to performdebit functions (e.g., a debit card), credit functions (e.g., a creditcard), or stored value functions (e.g., a stored value card).

The payment processor 160 may include data processing subsystems,networks, and other means of implementing operations used to support anddeliver issuer validation services, exception file services, andclearing and settlement services for payment transactions. The acquirer150, payment processor 160, and the issuer 170 make up a paymentprocessing system 180.

The payment processor 160 may include a server computer. A servercomputer is typically a powerful computer or cluster of computers. Forexample, the server computer can be a large mainframe, a minicomputercluster, or a group of servers functioning as a unit. In one example,the server computer may be a database server coupled to a web server.The payment processor 160 may use any suitable wired or wirelessnetwork, including the Internet.

The merchant 140 typically has a point of sale (POS) terminal (notshown) that can interact with the FIPPD 130. Any suitable point of saleterminal may be used, including device (e.g., card) readers. The devicereaders may include any suitable contact or contactless mode ofoperation. For example, exemplary card readers can include RF (radiofrequency) antennas, magnetic stripe readers, etc., to interact with theFIPPD 130.

As noted, a desirable element of the standard electronic paymenttransaction system is the entity responsible for the account managementfunctions involved in the transaction. Such an entity may be responsiblefor ensuring that a user is authorized to conduct the transaction (viaan on-line issuer validation by issuer 170 such as issuer 170authentication), confirm the identity of a party to a transaction (viareceipt of a personal identification number), confirm a sufficientbalance or credit line to permit a purchase, and reconcile the amount ofpurchase with the user's account (via entering a record of thetransaction amount, date, etc.). Also, such an entity may performcertain transit related services in addition to the standard transactionservices.

For example, the payment transaction processing entity may beresponsible for communicating with one or more transit agency computersystems to provide authentication data (by generating and/ordistributing keys) for control of access to transit systems, processdata obtained from a transit user's mobile device to associate transitsystem user identification data with an account used to pay for thetransit expenses, generate billing records for transit activities, etc.Note that a trusted third party may also perform some or all of thesefunctions, and in that manner act as a clearinghouse for access controldata and/or transit activity data processing.

Referring now to FIG. 2, transit fare collection is typicallyaccomplished in a closed transit processing system 200—the transitportable payment device 210 being issued by the transit system and thefare being calculated at the transit POS 240. The transit POS 240 may bea fare box or a turnstile with a transit system reader 220, such as acontactless card reader. The transit POS 240 collects and stores datasuch as the card identification number, card transaction history, cardvalidity information, etc. The transit POS 240 and the transit portablepayment device 210 validate each other, typically utilizing encryptionalgorithms and keys. The transit POS 240 then requests the data from thetransit portable payment device 210. The transit reader 220 and transitPOS 240 process the data from the transit reader 220 and apply the farepolicy rules for the transit agency. Processing of the fare rules willresult in a determination of a fare value, followed by the decreasingfrom the transit portable payment device 210 of value or number ofrides, or application of a pass (like a monthly pass.) The transitportable payment device 210 is updated through writing information backto the transit portable payment device 210 as necessary to document thetransaction on the transit portable payment device 210.

If one transaction has an impact on the cost of the next transaction, asin the case of a discounted transfer when the patron transfers to thenext leg of the journey, the appropriate transit portable payment device210 history is available at the time of the transfer transaction. Theinformation stored on the transit portable payment device 210 isavailable to make determination of the cost of the fare at the moment ofthe transaction. There is no need to query any other computers orservers to complete the transaction at the fare device and the rider isallowed to enter the access facility.

After the transaction is complete, the fare transaction information istypically transferred to transit central computer 270 via the transitprivate network 260 for purposes of accounting, reporting, and frauddetermination. Transit portable payment device 210 is uniquelyidentified by a transit account number, and is tracked for out ofbalance values, velocity, or use-rules. If the fraud rules are brokenand the transit portable contactless device 210 is determined to haveassociated fraud, the transit portable payment device 210 number may beplaced on a negative or positive list that may be kept in a storage thatis accessible to the transit central computer, such as is seen in FIG. 3at reference number 305 and described below. The hot list may be sent toeach transit POS 240 for use as a validation component at the time ofthe transaction. For example, if the transit portable payment device 210identification number is found on the hot list, the transit portablepayment device 210 may be denied for entry into the transit system.

Referring now to FIG. 3, a FIPPD 130 can be used in a scheme to conducta transaction within an open access system 300. Implementation of anaccess fare application does not allow the opportunity for the paymenttransaction to go on-line to the issuer 170 for an issuer validation(e.g., authorization) at the time of the transaction as would occur withthe merchant 140, such as a retail merchant. This is due in part to theneed to process a transaction in less than a second, typically withinabout 300 ms—a transit system industry standard, to allow 30 to 45patrons per minute into the transit facility (hereafter referred to asthe “access period”). The ability to go on-line in the transitenvironment may also be problematic because of the lack of real timecommunication and network systems. For example, buses are on the roadand may not have wireless or other communication systems to allowreal-time dialogue with any other systems outside of the bus.Consequently, one implementation combines a scheme of processes toconduct a fare transaction, such as has been illustrated in FIG. 3.

For example, a rider may present the FIPPD 130 at the transit POS havingthe transit reader 220. The transit reader 220 can capture from theFIPPD 130 financial institution account information, such as MagneticStripe Data (MSD), in an off-line mode (e.g., without communicating withthe payment processing system 180). The transit reader 220 may read allof a track data, or just part of the track data such as a primaryaccount number (PAN) associated with the FIPPD 130. The track data,along with other transaction information, such as the time of day andthe location of the transit POS 240, can be transmitted to the transitcentral computer 270 via the transit private network 260. At this point,however, the fare value may not be known. Nevertheless, the consumer isgiven access to the transit facility.

The transaction information can be stored and analyzed at the transitcentral computer 320. The transit central computer 320 may have adatabase containing transit transaction history for all riders that usethe transit system. The transit transaction history can be updated witheach FIPPD 130 usage at the transit POS 240 or it may be updated on abatch basis.

The transit transaction history may be accessed to calculate the valueof a fare off-line. For example, a set of the transit transactionhistory within the database can be accessed based on the PAN read fromthe FIPPD 130 at each transit event (e.g., entry, transfer, or exit)using the FIPPD 130; the transit transaction history may then be putinto a chronological order of transit events; and the transit fare canbe derived using the chronology of transit events on the basis ofpredetermined transit agency rules and policies.

Once the fare value is derived, the transaction can be processed incommunication with the payment processing system 180 as would a standardon-line retail transaction with the merchant 140. The fare value can betransmitted to the payment processing system 180 via the on-line network310. Once transmitted, the fare value can be authorized, cleared andsettled—as described for the payment system 100—with the merchant 140.

Referring to FIG. 4, a flow chart is used to illustrate an exemplaryprocess 400 through which the FIPPD 130 can be used in the open transitsystem 300. Process 400 begins at step 402 where data from the datastorage region of the FIPPD 130 associated with an account within thepayment system 100 is read. The data can include all of the track dataor subcomponent thereof. For example, the data can include anidentification for the FIPPD associated with the account such as thePAN. The data can be read by the transit reader 220 such as acontactless reader reading a contactless payment card that has beenissued by an issuer in a payment processing system. The transaction datacan include the data read at the transit reader 220 along with othertransaction information such as the date, the time of day, a merchantidentification code, the location of the transit POS 240, etc.

At step 420, optional validation request can be conducted at the transitPOS 240 including rudimentary checks on the status of the FIPPD 130 or avariations of on-line issuer validation (e.g., authorization) with thepayment processing system 180. For example, a transit validation can berequested, for instance, by examining the expiration date of the FIPPD130 at the transit POS 240. Also, a Modulus 10 analysis can be done atthe transit POS 240 wherein a checksum formula is used to validate anidentification number such as the PAN.

Alternatively, or in combination, the validation step 420 may include acheck against the transit agency's white list or black list maintainedeither at the transit POS 240 or at the transit central computer 270 todetermine if the rider should be permitted access into the transitfacility. The white list may be a list of data such as a hashed PANassociated with an eligible account that can be used to gain access tothe transit facility. Similarly, the black list, may be a list of dataassociated with an ineligible account, such a hashed signature thatcannot be used to gain access to the transit facility. Therefore, thewhite list or black list may consist of identifiers for portable paymentdevices, such as the PAN associated to the FIPPD 130 or a proxy thereof.The transit agency may place a portable payment device on such a list(e.g., white or black) based on various parameters. For example, theportable payment device may have been reported stolen by a consumer, theportable payment device may have been a stored value card that hasexhausted its value, or the portable payment device may have been usedin a repeated fashion over a course of a day such that fraud may besuspected. Stated otherwise, the “velocity” with which the portablepayment device is detected as having been used may indicate that fraudis being used to gain access to a transit facility; a transit agency mayhave a host of policies and rules that, when transgressed, place aportable payment device on the negative list. Each such list may be keptin the database 305 in communication with transit central computer 270or at the transit POS 240.

The transit agency may also place a consumer device on a white list orblack list based on a transmission originating from the paymentprocessing system 180, such as a response to an issuer validationrequest. For example, the transmission may have included a notificationfrom the issuer 170 that there has been a declined transaction involvingthe FIPPD 130 in the past or that the payment processing system's 180risk assessment on the FIPPD 130, the transit system may use compared tothe risk assessment to a transit toleration threshold for risk such thatthe transit agency may wish to place the FIPPD 130 on the negative listif the threshold is transgressed. Other responses to the issuervalidation request may be a balance check response, a credit scoreresponse, an authorization response, or a combination thereof.

The white list or black list can be hosted at the transit POS 240 or atthe database 305 in communication with the transit central computer 270,while still being in communication with the transit POS 240. When thelist is hosted at the database 305, the white list or black list can beupdated without having to make changes at each transit POS 240. Thetransit central computer 270 need not be a single computer. Rather, thetransit central computer 270 may be a network of computers such as anetwork with nodes for a set of transit readers 220. The nodes may beconnected to each other, either laterally and/or hierarchically.

At step 430, the transaction data can be transmitted to the transitcentral computer 270 for storage and analysis. The transit centralcomputer 270 may use database 305 to contain transit transaction historyfor riders that use the transit system over time. The transittransaction history can include transaction information such as the dateand time of a transit event, an identification of the transit POS 240,an identification of the transit agency, and at least some of the dataread from the data storage region of the FIPPD 130. The transittransaction history can be updated with each FIPPD 130 event at thetransit reader 220 or on a batch basis.

At step 440, the rider is given access to the transit facility. Thetransit facility may be a subway, a bus, a ferry, a trolley, a hovercraft, a train, and other forms of transportation as are typically foundwithin a transit system. Steps 410 to 440 may occur off-line within ashort period of time such as less than about one second or over a periodof time not exceeding the access period (e.g., 300 ms). Steps 410through 440 repeat as respective riders interact with the transit POS240.

At step 450, the transit transaction history stored in step 430 may beaccessed to calculate off-line (e.g., not in real time) the value of afare using the stored transaction data and the transit agency policies.For example, a set of the transit transactions can be accessed based onthe FIPPD 130 identification information, such as the FIPPD's 130 PAN;the set of transit transactions may then be ordered chronologically bytransit events (e.g., entry, transfer, or exit); and the transit farecan be derived using the chronology of transit events based onpredetermined transit agency rules and policies. For example, a transitagency may charge a transit fee based on predetermined fare policies,such as a flat fee of $2.00 (U.S.) for entry into the system. Otherexamples of predetermined fare policies include evaluating the farevalue based on: an entry into the facility of the transit system; anexit from the facility of the transit system; a distance for one entryand a corresponding exit; a transfer from one facility of the transitsystem to another facility of the transit system; the sequential numberof each transfer in a predetermined time period; a direction of travelin the transit system; a classification of the rider corresponding tothe FIPPD 130 (e.g., concessions based on age, student status, orfrequent ridership); peak and off peak travel time periods; a calendarholiday travel time period; and combinations of the foregoing. Those inthe art are familiar with the potential rules and policies that mayapply in calculating a transit fare.

Sometimes several FIPPDs 130 may have the same PAN. For example, ahusband and wife may each have their respective FIPPDs 130 linked totheir joint checking account. Alternatively, several employees of thesame employer may each have respective FIPPDs 130 all being associatedwith a single account (e.g.; PAN) within the payment processing system180. As such, the respective fare calculations for those employees usingtheir respective FIPPDs 130 to commute during the same time within thetransit system will need to take into consideration which card is beingused by each employee within the same PAN.

At step 460, the transit agency may transmit one of more calculated farevalues to the payment processing system 180 for collection based onvarious payment models. For example, the model used by the transitagency to request payment for the calculated fare values from thepayment processing system 180 may be a pay per each use model, anaggregation of multiple calculated fare values model, or a pre-paidmodel.

In the pay per each use model, when the transit fare is determined thefare is transmitted to the payment processing system 180 for collection.Therefore, the transit fare may be directly sent to the paymentprocessing system 180. Alternatively, the calculated transit fare may bebatched with other calculated transit fares for a plurality of FIPPDs130 over a period of time and then sent on an intermittent basis to thepayment processing system 180 for collection.

Once the transit fare is sent to the payment processing system 180 itcan be processed according to typical protocol for merchants 140. Forexample, each $2.00 transit fare can be authorized, settled, and clearedthrough the payment processing system 180, the transit agency can bepaid, and the consumer can receive the assessed transit fare(s) in amonthly statement corresponding to their PAN.

In the aggregation model, the transit fare involving FIPPD 130 may beaccumulated based on a predetermined algorithm prior to sending thetransit fare to the payment processing system 180. The cumulated transitfares may be over time, over transit value, or over quantity. Forexample, the transit agency may accumulate transit fares involving theFIPPD 130 that occur over a week period prior to transmitting theaggregate set of fares to the payment processing system 180.Alternatively, the transit agency may accumulate transit fare valuesbased on a threshold value. For example, once the accumulated transitfare value reaches $20.00 (U.S. dollars), the transit agency maytransmit the aggregated set of fares to the payment processing system180. In another example, the transit agency may accumulate the transitfare values based on the quantity of transit fares—such as when a riderhas completed five (5) rides involving the same FIPPD 130 where eachride had its own fare value (e.g., $4.00, $0.50, $1.00, and $5.00 U.S.dollars), and then accumulate the fares and transmit the total valuethereof to the payment processing system 180.

In the stored value model, the account associated with the FIPPD 130 isaccessed through the payment processing system 180 at the transitsystem. For example, the rider can ask the transit agent at a paymentbooth to deduct an amount from the rider's credit card associated withthe payment processing system 180 prior to the rider going to aturnstile to seek entry into a subway of the transit system. The transitagent may then conduct an on-line transaction with the paymentprocessing system 180 so as to charge a value against the account, forexample $50.00 (U.S. dollars). The transit system can then maintain atransit account associated with the FIPPD 130, for example, such thatthe transit account may be maintained at the transit central computer270. When the rider wishes to take the subway, the rider may go to theturnstile, bring up the FIPPD 130 in proximity to the transit reader 220in a contactless reading operation. The transit POS 240, in this casethe turnstile, may transmit the transit event to the transit centralcomputer 270 via the transit private network 260. Once a plurality ofsuch transit events are completed for the PAN associated with FIPPF 130(such as both an entry and an exit to the subway system for the rider),the transit fare can be calculated and deducted from the transit accountat the transit central computer 270. In this case, the on-linetransaction to record the transit event occurs before the off-linetransaction of the transit central computer 270 to collect theaggregated set of fares from the payment system 180.

The rider may set up the transit account such that the account is“topped off” at predetermined intervals—such as when the end of themonth arrives or when the transit account has reached a threshold lowestvalue such as $5.00 (U.S. dollars), whereby a predetermined amount ischarged to the account that is associated with the FIPPD 130 in thepayment processing system 180 Therefore, the transit system may conductan on-line transaction, for example for $50.00 (U.S. dollars) with thepayment processing system 180 once the predetermined interval isreached.

It should be understood that the present invention can be implemented inthe form of control logic, in a modular or integrated manner, usingsoftware, hardware or a combination of both. Based on the disclosure andteachings provided herein, a person of ordinary skill in the art willappreciate other ways and/or methods to implement the present invention.

It is understood that the examples and embodiments described herein arefor illustrative purposes only and that various modifications or changesin light thereof will be suggested to persons skilled in the art and areto be included within the spirit and purview of this application andscope of the appended claims.

1. A method comprising: at each of a plurality of point of serviceterminals (POS) of a merchant, for each of a plurality of consumers eachseeking to conduct a transaction with the merchant for a good or serviceat a cost by using a payment device issued by an issuer in a paymentsystem: reading data from a data storage region of the payment device,wherein the data includes an indication of an account issued by theissuer; storing information for each said transaction; and permittingthe consumer to receive the good or service from the merchant; andderiving after each said permitting, for at least one of thetransactions, one or more said costs assessable to respective saidaccounts.
 2. The method as defined in claim 1, wherein the at least oneof the transactions includes a batch of the transactions.
 3. The methodas defined in claim 1, wherein the deriving is in accordance with apredetermined policy set by the merchant.
 4. The method as defined inclaim 1, wherein the information stored for each said transactioncomprises the date and time thereof, an identification of the merchant,and at least some of the data read from the data storage region of thepayment device.
 5. The method as defined in claim 1, wherein: aplurality of the payment devices are associated with each said account;the data read from the data storage region of the payment device furtherincludes the identifier for the account; and the identifier for theaccount includes an identification for the particular said paymentdevice of the plurality of the payment devices that are associated withthe account.
 6. The method as defined in claim 1, wherein the storingfurther comprises: evaluating, using the identifier for the account,whether the transaction is validated; and for each said transaction thatis validated, permitting the consumer to conduct the transaction toreceive the good or service.
 7. The method as defined in claim 6,wherein the evaluating comprises using an processing system that is notin communication with the issuer.
 8. The method as defined in claim 6,wherein the evaluating comprises using an payment processing system incommunication with the issuer and remote from each said POS terminal. 9.The method as defined in claim 6, wherein the evaluating furthercomprises: forming a balance inquiry communication addressed to theissuer; receiving, in response to the communication addressed to theissuer, a balance of the account in an communication.
 10. The method asdefined in claim 1, wherein the payment device is within a mobile deviceselected from the group consisting of a personal digital assistant, awireless telephone, a fob, and an expert system including a substratehaving embedded therein a contactless element including a chip capableof use as a transaction payment mechanism for each said accesstransaction.
 11. A method comprising: at each of a plurality of accesssystem readers in an access system, for each of a plurality of riderseach seeking to conduct an access transaction for access to a facilityof the access system using a payment device issued by an issuer in apayment system: reading data from a data storage region of the paymentdevice, wherein the data includes an identifier for an account issued bythe issuer; storing information for each said access transaction; andpermitting the rider access to the facility of the access system; andderiving after each said permitting, for at least one of the accesstransactions, one or more fares assessable to respective said accounts.12. The method as defined in claim 11, wherein the at least one of theaccess transactions includes of a batch of the access transactions. 13.The method as defined in claim 11, wherein the reading, the storing, andthe permitting are all performed within a time period not exceeding one(1) second.
 14. The method as defined in claim 11, wherein the derivingis in accordance with a predetermined fare policy for the access system.15. The method as defined in claim 14, wherein the predetermined farepolicy for the access system comprises one or more classifications ofeach said access transaction selected from the group consisting of: anentry into the facility of the transit system; an exit from the facilityof the transit system; a distance for one said entry and a correspondingsaid exit; a transfer from one said facility of the transit system toanother said facility of the transit system; the sequential number ofeach said transfer in a predetermined time period; a direction of travelin the transit system; a classification of the rider corresponding tothe payment device; peak and off peak travel time periods; a calendarholiday travel time period; and combinations of the foregoing.
 16. Themethod as defined in claim 11, further comprising retrieving the atleast one of the access transactions from the plurality of transitsystem readers.
 17. The method as defined in claim 16, wherein theretrieving occurs at after each said access transaction.
 18. The methodas defined in claim 11, wherein the information stored for each saidaccess transaction comprises the date and time thereof, anidentification of the transit system reader, and at least some of thedata read from the data storage region of the payment device.
 19. Themethod as defined in claim 11, wherein: a plurality of the paymentdevices are associated with each said account; the data read from thedata storage region of the payment device further includes an identifierfor the account; and the identifier for the account includes anidentification for the particular said payment device of said pluralityof said payment devices that are associated with the account.
 20. Themethod as defined in claim 11, wherein the data is contactlessly readfrom the data storage region of the payment device.
 21. The method asdefined in claim 11, wherein the payment device is a contactless paymentdevice.
 22. The method as defined in claim 11, wherein the storingfurther comprises: evaluating, using the identifier for the account,whether the access transaction is validated; and for each said accesstransaction that is validated, permitting the rider to conduct theaccess transaction to gain said access.
 23. The method as defined inclaim 22, wherein the evaluating comprises using a processing systemthat is not in communication with the issuer.
 24. The method as definedin claim 23, wherein the processing system cross-references theidentifier for the account to a list of other said identifiers for othersaid accounts to determine whether the identifier for the account isvalidated for the access transaction.
 25. The method as defined in claim23, wherein the evaluating comprises using a processing system incommunication with the issuer and remote from each said transit systemreader.
 26. The method as defined in claim 25, wherein the processingsystem cross-references the identifier for the account to a list ofother said identifiers corresponding to other said accounts to determinewhether the account is validated for the access transaction.
 27. Themethod as defined in claim 22, wherein the evaluating further comprises:forming a balance inquiry communication addressed to the issuer;receiving, in response to the communication addressed to the issuer, abalance of the account in an communication.
 28. The method as defined inclaim 11, further comprising forming one or more communications eachaddressed to a member of the payment system for the collection by thetransit system of one or more said assessable fares.
 29. The method asdefined in claim 28, wherein each said communication containsinformation about the collection in a classification selected from thegroup consisting of pay per said assessable fare, aggregation of aplurality of said assessable fares, and stored value against which theassessable fares are deducted, and combinations thereof.
 30. The methodas defined in claim 28, wherein the member is selected from the groupconsisting of an issuer, an acquirer, a transaction processor for saidassessable fares, and combinations thereof.
 31. The method as defined inclaim 11, wherein the payment device is selected from the groupconsisting of a credit card, a debit card, a stored value card, apre-paid card, and combinations thereof.
 32. The method as defined inclaim 11, wherein the payment device is within a mobile device selectedfrom the group consisting of a personal digital assistant, a wirelesstelephone, a fob, and an expert system including a substrate havingembedded therein a contactless element including a chip capable of useas a transaction payment mechanism for each said access transaction. 33.A method comprising: at each of a plurality of transit system readers ina transit system, for each of a plurality of riders each seeking toconduct an access transaction for access to a facility of the transitsystem using a payment device issued by an issuer in a payment system:reading data from a data storage region of the payment device, whereinthe data includes an identifier of an account issued by the issuer;storing information for each said access transaction; evaluating, usingthe identifier for the account and a processing system that is remotefrom the transit system reader and not in communication with the issuer,whether the access transaction is validated; and for each said accesstransaction that is validated, permitting the rider to conduct theaccess transaction to gain said access to the facility of the transitsystem; retrieving at least one of the access transactions from theplurality of transit system readers after the occurrence of each saidaccess transaction; deriving in accordance with a predetermined farepolicy for the transit system after each said permitting, for at leastone of said access transactions, one or more fares assessable torespective said accounts; and forming one of more communications eachaddressed to a member of the payment system for the collection by thetransit system of one or more said assessable fares.
 34. The method asdefined in claim 33, wherein the reading, storing, evaluating, andpermitting are all performed within a time period not exceeding one (1)second
 35. The method as defined in claim 33, wherein the payment deviceis selected from the group consisting of a credit card, a debit card, astored value card, a personal digital assistant, a wireless telephone, afob, and an expert system including a substrate having embedded thereina contactless element including a chip capable of use as a transactionpayment mechanism for each said access transaction.